Accounting For Affiliate Marketers
By Charles Waters, Sat Dec 10th

If you are an affiliate marketer, then you are in business.Therefore, you should treat it like a business. Keep in mindthat Linkshare, Clickbank, Commission Junction and all the otheraffiliate marketplaces are going to report your earnings to theIRS.

Each of them requires that you provide a Social Security Numberor EIN number when you apply with them. These numbers are usedto report your earnings. At the end of the year, you'll receivea 1099 form which is the IRS earnings document given toIndependent Contractors.

Since you have to pay taxes on your income, you should take careto make sure that your income is properly calculate. Remember,gross adjusted income is going to be the total amount that youearned - your expenses. For this reason, you really need to keeptrack of all of your affiliate marketing expenses.

Keep receipts and track all the following:

* Web Hosting Costs

* Affiliate marketing tools (such as your WordTracker membershipfees, the cost of products like Adwords Analyzer, etc.)

* Any PPC advertising that you purchase.

Don't do as I have been prone to do and wait til the end of theyear before you start putting these numbers together. You'llforget many and you won't be able to gain access to others.

For example, with PPC advertising, Google seems to keep recordsonline forever. Great. But Overture only keeps the last 90 daysand you can't - I repeat - You CAN'T get those records olderthan 90 days. (Ask me how I know :(

Getting receipts

means that you'll have to think ahead. When youbuy something online, print the receipt page. When you subscribeto a service that may pull a fee from your checking account orcredit card account on a monthly basis, make sure to opt in toany e-mail notification of transactions that you might be ableto get.

Print everything out and put it in a folder for that years taxrecords. You won't regret it when tax season comes along.

You will also get a much better picture of how much money you'reearning. I think a lot of affiliate marketers brag about theirchecks, but conveniently forget that out of the $10,000.00 theyearned last month, they spent $8,000.00 for PPC advertising,$27.00 for Wordtracker, $100.00 for their web host, ect, etc,reducing their actual profit to enough to buy some bubble gum.

There's great software that makes all of this easier of course.Quicken or MS Money Home and Business editions or PeachTreeaccounting would all make the whole process of tracking thesenumbers much less painful.

Finally, there are real benefits (and some costs) toincorporating yourself. Incorporating changes the tax rules andcreate scenarios that let you put more of your profit into yourpocket. They also help to shield you from liability. I'm not alawyer, so I'd recommend talking to an tax law lawyer. Iincorporated in Florida and the entire expense was about$495.00.

About the author:Charles Waters discovered the wonderful world of affiliatemarketing in 2003 and has never looked back. Today, he operatesseveral successful money making web pages, including The Affiliates Home.